Photo/Shetuwang

May 14 (NBD) -- Chinese on-demand retail and delivery platform Dada Nexus filed on Tuesday with the U.S. Securities and Exchange Commission to raise up to 100 million U.S. dollars in an initial public offering.

Goldman Sachs Asia, BofA Securities and Jefferies will serve as the underwriters. As of the date of this prospectus, JD.com and Walmart each holds approximately 51.4 percent and 10.8 percent equity interests of Dada Nexus.

Founded in 2014, Dada Nexus now operates the delivery platform Dada Now and local retail platform JD-Daojia, which contribute, respectively, 63 percent and 35.6 percent to Dada Nexus's total net revenues.

JD-Daojia, the former local retail platform and a strategic asset of JD.com, was acquired by Dada Nexus in 2016. Judging from the prospectus, JD.com is not only the largest shareholder, but also the biggest net revenue contributor of Dada Nexus. 

In 2017, 2018, and 2019, 56.7 percent, 49.1 percent, 50.5 percent of Dada Nexus' net revenues were derived from services provided to JD Group, respectively. In the first quarter of 2020, the metrics was down to 37.8 percent, while Walmart contributed 14.9 percent of the net revenue. That means Dada Nexus depends much on JD.com and Walmart.

Another issue facing Dada Nexus is its rising costs, mainly salary payment for riders. National Business Daily noticed that the company's rider cost stood at around 1.53 billion yuan (215.7 million U.S. dollars), 1.92 billion yuan and 2.68 billion yuan, respectively, during 2017-2019, which are equivalent to its net losses.

Dada Nexus is an early starter but obviously not the only player in the instant delivery sector.

In 2017, its rival Meituan piloted instant delivery business by launching "errand service". In 2018, its "instant buying service" went alive, covering fruits, flowers and other items in supermarkets. In 2019, Meituan officially launches "Meituan Delivery", connecting convenience stores, traditional supermarkets and office buildings.

In June 2019, Alibaba-backed Ele.me announced the independence of instant logistics brand "Fengniao" and aimed to build 20,000 digital delivery stations. In March of this year, the tech giant's Cainiao Network completed the acquisition of an instant delivery company Dianwoda.

Email: gaohan@nbd.com.cn